A manufacturer maintains an inventory of needles. Inventory consumption is constant at 1200 needles per day and lead time for new needles is constant at five days. If the manufacturer wishes to maintain a safety stock of 600 needles, what should its reorder point be? OA. 5000 OB. 5400 OC. 4800 OD.7200 OE. 6600 OF. 6000
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- A firm uses the order-up-to model to manage its inventory. It wants to increase its in-stockprobability while decreasing its holding costs (i.e., reducing its average inventory). Which ofthe following actions will help to achieve this goal? (Consider each action independently.)I. Decrease the lead time.II. Increase the order-up-to level.III. Increase the average quantity on order.a. Only Ib. Only IIc. Only IIId. I and IIe. I and IIIf. II and IIIg. Any of them will help (that is I, II, or III).h. None of them will help.A firm manages its inventory with an order-up-to model. Each period is one day, thelead time is two days, the order-up-to level is 10, and its inventory position at the start ofa day (before it submits an order for that day) is –4. Which of the following statementsis definitely true? a. Demand was four units yesterday.b. Demand was 10 units yesterday.c. There are at least four units backordered.d. There are 14 units on order before it orders today.e. After today’s order, there will be 14 units on order.f. It will receive more inventory todayFixed-order-interval. This type of problem can be recognized when an order interval is given (e.g.,inventory is ordered every 10 days) along with the demand rate, lead time, and quantity on hand atorder time. Use Formula 13–16 to find the optimal order size.A lab orders a number of chemicals from the same supplier every 30 days. Lead time is five days.The assistant manager of the lab must determine how much of one of these chemicals to order. Acheck of stock revealed that eleven 25-milliliter (ml) jars are on hand. Daily usage of the chemical isapproximately normal with a mean of 15.2 ml per day and a standard deviation of 1.6 ml per day. Thedesired service level for this chemical is 95 percent.a. How many jars of the chemical should be ordered?b. What is the average amount of safety stock of the chemical?
- The best quantity to order One of the formulas for inventorymanagement says that the average weekly cost of ordering, payingfor, and holding merchandise iswhere q is the quantity you order when things run low (shoes,TVs, brooms, or whatever the item might be); k is the cost ofplacing an order (the same, no matter how often you order); c isthe cost of one item (a constant); m is the number of items soldeach week (a constant); and h is the weekly holding cost per item(a constant that takes into account things such as space, utilities,insurance, and security). Find dA>dq and d2A>dq2.Rocky Mountain Tire Center sells 20,000 go-cart tires per year. The ordering cost for each order is $40, and the holding cost is 20% of the purchase price of the tires per year.The purchase price is $20 per tire if fewer than 500 tires are ordered, $18 per tire if 500 or more-but fewer than 1,000- tires a re ordered, and $17 per tire if I ,000 or more tires areordered.a) How many tires should Rocky Mountain order each time it places an order?b) What is the total cost of this policy?Vetox sells industrial chemicals. One of their inputs can be purchased in either jugs orbarrels. A jug contains one gallon, while a barrel contains 55 gallons. The price pergallon is the same with either container. Vetox is charged a fixed amount per orderwhether it purchases jugs or barrels. The inventory holding cost per gallon per monthis the same with either jugs or barrels. Vetox chooses an order quantity to minimizeordering and holding costs per year. Would Vetox purchase a greater number of gallonswith each order if it purchased with jugs or with barrels?a. They would order a greater number of gallons with barrels.b. They would order the same number of gallons with either container.c. They would order a greater number of gallons with jugs.d. They might order a greater number of gallons with jugs or with barrels, depending onvarious factors like the demand rate, ordering cost, and holding cost.
- Rocky Mountain Tire Centre sells 20,000 tires of a particular type per year. The ordering cost for each order is $40, and the holding cost is 20% of the purchase price of the tires per year. The purchase price is $20. per tire if fewer than 500 tires are ordered, $18. Per tire if more than 500 but fewer than 1,000 tires are ordered and $17. per tire if 1,000 or more tires are ordered. Quantity Unit Price 1-499 $20. 500-999 $18. 1000 & over $17 Based on available information, lead time demand for CD-ROM drives averages 50 units (normally distributed), with a standard deviation of 5 drives. Management wants a 97% service level. What value of Z should be applied? How many drives should be carried as safety stock?A firm incurs $30 in fixed order costs per order and a holding cost per unit of $1per year. Annual demand is 10,000 units. The firm is required to order an integer multiple of500 units. What order quantity should the firm use to minimize ordering and holding costs?Please do not give solution in image formate thanku. A given product has an expected demand of 240 units per month, with a standard deviation of 70 units per month. Leadtime is 0.5 months. Customer service level (CSL) has been set so that we have a value of k=1.28. We want to manage this product's inventory using a (R, S) periodic review policy. We plan to order every 2 months (R = 2 months). Using the k value from above, what is the order up to level, S, for this policy? Give your answer rounded to the closest integer. Since orders are placed every 2 months, and the demand is variable, the order quantities are not identical. But we can estimate an average order size. What is the expected average order size for the policy described above? Under this policy, how many orders are placed per year? Placing each order costs $100. What is the annual ordering cost?
- With a probabilistic model, increasing the service level A. will decrease the level of safety stock level. B. will increase the cost of the inventory holding. C. will have no impact on the cost of the inventory policy. D. will reduce the cost of the inventory holding.You are the owner of Hotspices.com, an online retailer of hip, exotic, and hard-to-findspices. Consider your inventory of saffron, a spice (generally) worth more by weightthan gold. You order saffron from an overseas supplier with a shipping lead time of fourweeks and you order weekly. Average weekly demand is normally distributed with amean of 40 ounces and a standard deviation of 30 ounces.a. Suppose it uses an order-up-to level of 301 ounces. What is its expected on-hand inventory? b. Suppose it uses an order-up-to level of 250 ounces. What is its expected on-order inventory? c. Suppose it uses an order-up-to level of 368 ounces. What is its in-stock probability? d. Suppose it wants a .96 in-stock probability. What should its order-up-to level be?A hospital orders its thermometers from a hospitalsupply firm. The cost per thermometer depends on the ordersize q, as shown in Table 6. The annual holding cost is 25%of the purchasing cost. Let EOQ80 be the EOQ if the costper thermometer is 80¢, and let EOQ79 be the EOQ if thecost per thermometer is 79¢.a Explain why EOQ79 will be larger than EOQ80. b Explain why the optimal order quantity must be ei-ther EOQ79, EOQ80, or 100. c If EOQ80 100, show that the optimal order quan-tity must be EOQ79. d If EOQ80 100 and EOQ79 100, show that theoptimal order quantity must be either EOQ80 or 100.e If EOQ80 100 and EOQ79 100, show that the optimal order quantity must be EOQ79.